Top five questions on the Shared Savings Program

October 26, 2011

Rivka Friedman, Health Care Advisory Board

After much anticipation, CMS has released its final rule for the Medicare Shared Savings Program (SSP), as called for under the Patient Protection and Affordable Care Act. In a recent webconference, the Health Care Advisory Board outlined the key changes to the program in the final rule and reviewed the broader strategic implications of the program's structure. Members posed a number of excellent questions during the presentation, and we've pulled out five of the key questions below.

Question: How do changes to the Shared Savings Program affect the Pioneer ACO Model?

For the most part, changes to the SSP do not affect Pioneer. One exception is with regard to the quality component of each program. The Pioneer ACO Model rule was written such that both the list of quality metrics for which Pioneer ACOs will be held accountable, and the method for determining quality’s impact on a Pioneer ACO’s bonus, are adjusted to be consistent with the final regulations for the Medicare Shared Savings Program. This means that Pioneer ACOs will be judged based on their performance on the 33 quality metrics listed in the SSP final rule, not the 65 in the proposed rule.

Question: How does performance against the quality measures impact the bonus payment?

ACOs participating in the SSP are eligible to share in savings in overall Medicare expenditures for attributed beneficiaries at a maximum rate of 50 or 60 percent (depending on the model). The actual sharing rate used to determine an ACO’s SSP payment is determined by multiplying the maximum sharing rate by the percentage of available quality points that the ACO earns. Earning 100% of quality points yields sharing at the maximum rate, whereas earning half of the total quality points would yield an actual sharing rate of 25% or 30%. ACOs earn quality points for simply reporting in the first year of participation, but by the third year of participation will receive quality points based on actual performance.

Question: Can patients opt out of participating in the Shared Savings Program?

In the final rule, CMS maintains patients’ ability to freely choose providers without regard to provider participation in an ACO. To ensure this freedom of choice, providers participating in the SSP must inform patients that the provider is participating in the SSP and that the patient retains freedom of choice. In addition, ACOs requesting patient-identifiable claims-level data from CMS must first notify patients of their intent to request data and the patient’s opportunity to refuse to allow CMS to share such information with the ACO. CMS would not share with the ACO any data from beneficiaries who opt-out, but would still include these beneficiaries in determining shared savings payments or losses.

Question: Are primary care physicians still required to remain exclusive to one ACO? What about specialists?

There are two related issues to consider here. First, CMS has changed its patient attribution model to base ACO assignment on both primary care physicians (PCPs) and specialists who provide primary care services, if the patient did not otherwise see a PCP. As a result, organizations that bill either for PCPs or for specialists who provide primary care services will be required to commit exclusively to a single ACO. However, CMS has also clarified that this exclusivity applies only to the billing organization, as defined by a taxpayer identification number (TIN), and not to individual providers. If individual providers bill through more than one TIN, and those TINs belong to different ACOs, the physicians themselves may also participate in different ACOs—although in practice, the majority of physicians likely bill through just a single TIN. Organizations containing only specialists who do not provide primary care services must also be allowed to participate in multiple ACOs.

Question: What factors should an organization consider in deciding between Track 1 and Track 2 of the SSP?

With the elimination of downside risk and the new promise of first-dollar savings, Track 1 now represents an attractive option for ACOs wary of diving too deeply into the shared-savings pool. The two-sided Track 2, requiring the repayment of losses, offers higher rewards, but also higher risk. To succeed under Track 2, ACOs must be prepared to perform well with no ramp-up period. Organizations applying for this track should be confident in their ability to manage population risk (e.g., a history of successful experience with shared savings or capitation); maintain strong and stable physician relations; and have built an infrastructure to foster care management and target specific segments of utilization risk, such as avoidable emergency visits, preventable medical admissions, and unnecessary readmissions.

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For those who missed our first webconference, “The Medicare Shared Savings Program: Analysis of the Final Rule and Strategic Implications for Providers,” we will be offering the webconference on three additional dates. Click here to register for an upcoming webconference.

For more updates and analysis from Rivka, follow her on Twitter at @RivkaFriedman.

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